Why firms must focus on retention right nowBY GEORGE MCFERRAN
The financial services employment market in Hong Kong has seen better days. Put simply, there are more redundancies and fewer vacancies than a year ago as many institutions strive to slash costs in an uncertain global economic environment.
All this, however, doesn’t mean that employers can choose to ignore employee attrition. The current quarter is in fact an ideal time for firms to focus on retaining those who have survived the cutbacks and are therefore likely to be top performers in critical parts of their business.
Although there aren’t too many opportunities available, especially in front-office investment banking, the desire to move roles is still strong for some job seekers.
Two thirds, (66%) of finance professionals in Hong Kong and China, plan to jump ship this year, according to a 2012 Retention Survey. Yet they are realistically cautious about their chances of success, with a similar proportion (65%) expecting a difficult job search.
The potential danger for employers is that pent-up demand to leave their ranks will grow throughout the year, resulting in too many staff quitting when markets pick up – just the time when they want to be growing, not losing talent. An equally serious retention problem is already underway.
Senior human resources professionals at a recent HR roundtable in Hong Kong agreed that more people are leaving financial services this year for roles in other sectors. In an era of lower bonuses and leaner teams, they are questioning whether working long hours is still worth the effort, especially when many corporate-sector employers seem less vulnerable to economic cycles and retrenchments.
With turnover threats such as these, coupled with firms being loath to spend money on replacing staff in a cost-conscious climate, it is no wonder the roundtable attendees identified retention as a priority for both line managers and HR. While this article cannot attempt to cover all the varied and personal causes of attrition, it is interesting nevertheless to examine some of the broad factors that are helping to shape retention strategies.
Reasons for retention
In the retention survey, a perceived lack of career progression at their current company beat compensation as the top determining issue for those considering a move. Retention does not always come down to bidding wars and counter offers because employees are now increasingly looking for a mapped-out internal path that will put them in a stronger position in the future.
A lack of recognition for accomplishments is the third most important motivator to change jobs. According to the survey, this poses a challenge to how leaders manage their teams, especially when many people feel under pressure following downsizing. Moreover, said the roundtable panelists, how firms handle the aftermath of layoffs is essential to whether their remaining staff stay loyal in the longer term. Line managers should meet employees and clearly explain the business case behind their colleagues’ redundancies. Having plans to redeploy, or at least offer career advice to, retrenched staff also helps to improve morale among the survivors.
Also critical when considering a new role are flexible working arrangements. Work-life balance in the finance sector – while historically poor and still inappropriate for some jobs such as trading – is growing in importance as bonuses become a less potent retention tool. Yet HR professionals admit there are challenges implementing such policies in Asia, which does not have the same culture of part-time work as the West. In the words of one roundtable delegate: “People are sometimes reluctant to ask for more flexibility because their colleagues won’t see that they’re hard at work in the office.”
Although work-life balance initiatives are often company wide, some organisations are taking a more individual approach by allowing managers to authorise reasonable requests from staff without having to receive HR approval. Flexible working can also be targeted at particular groups, such as women returning from maternity leave. And importantly, employers should provide proper technical support to those who work from home, and establish ground rules to ensure they are not always tied to their mobile devices late at night.
Retention clearly matters right now to financial services employers thanks to factors including the high cost of replacing staff, potential attrition when markets recover, and a growing desire to quit the financial sector for industries that now offer similar compensation and better work-life balance. It is up to senior management, line managers and HR to work together to create an environment conducive to boosting retention rates in Asia – concentrating on the issues most relevant in the post-GFC financial world, career progression chief among them.